Light Reading

Iliad Offers $15B for a Stake in T-Mobile

Dan Jones
7/31/2014
50%
50%

French operator Iliad has made a brazen $15 billion bid to scupper the long-rumored Sprint-T-Mobile US merger this Thursday and to try and get a 56.6% stake in the "uncarrier" for itself.

Iliad (Euronext: ILD) is initially offering $15 billion in cash for the majority stake, which would value T-Mobile US Inc. 's stock at $33. Further to that, the French operator says it values the remaining 43.4% of T-Mobile US stock at $40.5 per share.

This would give shareholders an overall value of $36.2 per share. T-Mobile's shares opened at $31.02 on Thursday.

"The US mobile market is large and attractive," Iliad said in a statement. "T-Mobile US has successfully established a disruptive position, which in many ways, is similar to the one Iliad has built in France."

At first sight, the bid looks akin to a minnow trying to swallow a guppy. T-Mobile's current market cap is $24.84 billion, while Iliad's stands at $16 billion.


Read up on T-Mobile's Q2 earnings here.


Nonetheless, Iliad says that it will finance its cash bid through a combination of debt and equity and has the support of international banks to raise acquisition debt money.

Whatever happens, an Iliad bid puts more heat on a oft-rumored $32 billion hook-up between Sprint Corp. (NYSE: S) and T-Mobile US. Any potential merger between the number three and four US wireless operators would always face intense security by government authorities as well. (See Sprint, T-Mobile Settle on $32B Price.)

"This transaction should not raise any antitrust issue in light of the competition rules given that Iliad is not present in the United States," Iliad writes of its bold bid.

T-Mobile's shares are now trading up around 5.82% at $32.74.

— Dan Jones, Mobile Editor, Light Reading

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
7/31/2014 | 9:55:53 PM
Re: Start of a bidding war?
We often talk of a Sprint/T-Mobile relationship, but couldn't Softbank all along place an offer on T-Mobile?  Why couldn't Softbank do this on its own, much like it did with Sprint, and thus begin investing in multiple carriers without operating them (for now).

I'm sure I have an investment in all four major carriers (through 401k funds :-) ) and I didn't need special approval.

Still, you get my point--it seems like Softbank is hamstrung because it has an equity interest in Sprint, or, maybe, the whole Sprint/T-Mobile discussion is chest puffing for a bigger play and there isn't a real intention at all for Sprint to merge with T-Mobile.
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
7/31/2014 | 7:53:48 PM
Re: Start of a bidding war?
@James_B_Crawshaw,

That's a good position to be in. It's also a position to aspire to be in.
James_B_Crawshaw
50%
50%
James_B_Crawshaw,
User Rank: Blogger
7/31/2014 | 5:01:32 PM
Re: Start of a bidding war?
Iliad's minority shareholders get nothing. Iliad's CEO (who owns 55%) gets to play Masayoshi Son for a while ...
ethertype
50%
50%
ethertype,
User Rank: Light Sabre
7/31/2014 | 4:54:01 PM
Why?
What on earth would Iliad gain from succeeding?  4th rank in a market they don't understand at all.  The opportunity to race Sprint to the bottom on price. Zero synergy. This makes no sense.

Given that, I have to agree with James B Crawshaw that it begs credulity as a serious offer, but when he says "this is just a stunt to get Sprint to make their offer earlier," I wonder why they would even care to do that?  Is there any sense in which Sprint and Iliad are competitors or Iliad would benefit by driving up Sprint's price?

C'mon, LR, when you see something this ridiculous, YOU should be asking these questions rather than accepting it at face value.
DanJones
50%
50%
DanJones,
User Rank: Blogger
7/31/2014 | 4:49:44 PM
Re: Start of a bidding war?
But what would Iliad gain from forcing Sprint's hand, I don't get that at all.
James_B_Crawshaw
50%
50%
James_B_Crawshaw,
User Rank: Blogger
7/31/2014 | 4:35:55 PM
Re: Start of a bidding war?
If Iliad seriously wanted to buy a 57% stake in T-Mobile US they would go to Deutsche Telekom (who owns 67%) not the board of T-Mobile US. This is just a stunt to get Sprint to make their offer earlier than anticipated. Quite what Iliad's minority shareholders get out of this I don't know. They can buy shares in US telcos on their own account if they wish. They don't need Iliad to do so. Seem's like M. Niel's ego has got the better of his rationality ...
DanJones
50%
50%
DanJones,
User Rank: Blogger
7/31/2014 | 2:57:30 PM
Start of a bidding war?
Is this the start of a bidding war? Legere mentioned "multiple" inorganic options for growth on the Q2 call. I assume he didn't just mean Cuban heels?
Flash Poll
From The Founder
Ericsson's Hyperscale Datacenter System (HDS) 8000, featuring Intel's Rack Scale Architecture, caused a stir when it was announced at MWC 2015. For more on this revolutionary product, join me on Thursday, April 30 at 12:00 p.m. EST for a Super Webinar event, A New Hardware Paradigm for the Telco Data Center.
LRTV Documentaries
CableLabs' Clarke Updates Cable Virtualization

4|23|15   |   05:41   |   (1) comment


Former BT exec now leading CableLabs' NFV and SDN efforts explains key role of open source and updates efforts to virtualize the home network.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. II

4|23|15   |   08:19   |   (1) comment


In the second installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about cultural change, network slicing and technology advances.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. I

4|23|15   |   09:27   |   (3) comments


In the first installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about the incredible transformation underway in the communications networking industry.
LRTV Documentaries
LTE Paves the Way for the 5G Revolution

4|20|15   |   4:20   |   (0) comments


Håkan Andersson, head of 5G product strategy of the Radio Business Unit at Ericsson, discusses the role of LTE, the US and other industry verticals in building a true 5G ecosystem.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
Upcoming Live Events
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
In its latest survey covering network operators' plans and strategies for ICT transformation, Heavy Reading asked telecom operators worldwide to identify the most important goals and objectives for their ICT transformation initiatives. Heavy Reading also asked operators about the importance of a "digital first" strategy, which enables customers to complete an interaction across different digital channels, such as web and mobile self-service and social media.
Hot Topics
What if the Comcast Merger Fails?
Mari Silbey, Independent Technology Editor, 4/20/2015
Google's WiFi-First Mobile Service 'Fi' Is Here
Dan Jones, Mobile Editor, 4/22/2015
Comcast Merger May Hinge on Hulu
Mari Silbey, Independent Technology Editor, 4/22/2015
Comcast Formally Ends Its Bid for TWC
Mari Silbey, Independent Technology Editor, 4/24/2015
Google Ready to Release Thousands of Loons
Sarah Thomas, Editorial Operations Director, 4/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Many leading communications companies can claim to have undergone significant periods of reinvention during their histories, but none have been through more major ...
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
Cats with Phones
Learning Curve Click Here
Pierre could never remember how to use Excel.
Latest Comment